Calculate the after tax cost of calling the issue

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Reference no: EM131317584

For each of the callable bond issues in the following table, calculate the after-tax cost of calling the issue.

Each bond has a $1,000 par value, and the various issue sizes and call prices are shown in the following table. The firm is in the 40 percent tax bracket.

Bond	Size of issue	Call Price
A	12,000 bonds	$1,050
B	20,000	1,030
C	30,000	1,015
D	50,000	1,050
E	100,000	1,045
F	500,000	1,060

Reference no: EM131317584

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